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As Arizona housing prices rise, wages are not keeping up

Housing Metro Phoenix
Posted at 5:56 PM, Mar 02, 2021
and last updated 2021-03-02 20:43:59-05

In Arizona, wages are not keeping up with the rising costs of housing.

Workers need to make $21.10 an hour to afford a market-rate 2-bedroom rental, according to a 2020 report from the National Low Income Housing Coalition (NLIHC). That wage amount increases to $22.56 in Maricopa County.

But that same report showed the median hourly wage did not reach $21.10 for more than 900,000 jobs in Arizona, including retail workers, bookkeeping clerks, office workers and customer service representatives.

Historical data suggests it could be years before wages catch up.

A 2020 City of Phoenix housing report found that between 2010 and 2018 the median home price in the city rose by 57%, rental prices rose by 28%, but wages only rose by 10%.

The slower pace of wages, along with overwhelming growth and a shortage of housing stock are major contributors to the affordability crisis that low-wage earners in Phoenix are facing.

Emilia Jackson, of Phoenix, is more than able to make rent for her apartment, but only because it is subsidized and allows her to pay 30% of her monthly income toward housing.

Jackson makes $17 an hour working in medical insurance verifications, a position she has held for the past three years. But since going through a divorce, she had a hard time finding a place she could afford.

“(I was) paying, you know, for the applications, having them to tell me I was denied,” she said.

For months she and her three children house-hopped between family members' homes until she was accepted by Homeward Bound, a non-profit that provides a year-long program with transitional housing, financial classes and workforce training for families experiencing homelessness.

“We see families coming through our door with 17, 18, 19 dollars an hour that still aren’t able to afford rent outside of Homeward Bound,” Jordan Moreno, spokesperson for Homeward Bound told ABC15.

Moreno said success used to mean that at the end of their year-long program, participants would have enough money saved for a down payment on a home.

“And now that's just not the reality anymore,” Moreno said. “Now we're seeing families go into renting an apartment, and that is considered success. If they have enough money to put down a deposit, and the first few months of rent and to be able to be sustainable with that.”

Sheree Bouchee, Phoenix Affordable Housing Program Manager told ABC15 many renters and owners are spending more on their housing than they can afford.

“Fifty percent of our renters are cost-burdened,” Bouchee said. “And 20% of our owner-occupied folks that actually own their home are cost-burdened by their home.”

Cost-burdened is defined as spending more than 30% of one’s monthly income on housing and utilities. Anything more leaves less money for other necessities or to save for unexpected costs.

“If you have an emergency come up, or a medical emergency or you lose your job, you really have a hard time being able to pay for that housing cost,” Bouchee said.

The most recent data included in the city’s report shows neighborhoods in west and South Phoenix are most impacted.

In some cases, “more than 50% of households were paying 30% or more of their income on housing costs, while less than 29% of renting households were housing cost-burdened in the north,” the report said.

The gap in wages compared to housing costs are just another way that families end up evicted, living in shelters, on the streets or if they’re lucky in transitional housing like Jackson.

“I love the program. I've got nothing but good to say about the program,” Jackson told ABC15.

But her year at Homeward Bound will be up in October. While she has saved enough to rent a place of her own, she only makes enough to a studio or one-bedroom apartment for her children to share.

“I still probably would not be able to afford monthly you know, a two-bedroom or three-bedroom,” she said.